Catalina Food Mailer Seeks Hispanics Based On Buying Behavior

Catalina Marketing Corp. this summer for the first time will target supermarket shoppers who show Hispanic characteristics based on transactional behavior.

The checkout-coupons-to-database marketing firm plans a mailer of coupons, offers and ads to 150,000 frequent-shopper-card users from a database of an undisclosed major supermarket chain in Southern California.

What distinguishes this 20-page co-op mailing with food marketers from others aimed at Hispanics is that the targeting is based not just on proximity to the supermarket or an ethnic neighborhood. That data is combined with food shopping habits associated with Hispanics.

"It is kind of 'you are what you eat,'" said Mike Hernandez, director of marketing at Catalina's direct marketing services division in Costa Mesa, CA.

Catalina analyzed transactions for all 16,000 stores nationwide that are part of its network, identifying loyalty card users who showed Hispanic tendencies for food buying. This resulted in a Hispanic lifestyle profile of 6.4 million households -- people who bought Mexican Bimbo bread, at the obvious end, and Colgate toothpaste, at the other end.

Next, Catalina then chose 3.5 million of the households that are highly likely to respond and redeem coupons. But only 70 percent of those households had viable deliverable addresses that Catalina could match with frequent-shopper-card ID.

Finally, 150,000 cardholders were selected for their purchase history that was relevant to the brands featured in the Catalina mailer.

"The Catalina network database of households is 100 million-strong, but it's not a list that we market, and really our database is used for one-time or ongoing direct mail programs to frequent cardholders of our supermarket clients," Hernandez said. "We give manufacturers access to these frequent card shoppers with certainty, but we are not in the list business."

Simply put, Catalina sought to identify households with a high propensity of Hispanic behavior.

So how did Catalina know what Hispanics on these databases typically eat?

The company built a profile of 4,100 products that its analysis showed Hispanics usually buy. Catalina supermarket clients sent data from locations in Hispanic-concentrated neighborhoods that reported such product preferences. This allowed for a comparison between the types of merchandise that moved quickly in those stores vs. locations in non-Hispanic neighborhoods.

Once winnowed, the 4,100 products were matched against the entire Catalina database to determine which households showed high purchase behavior relative to those products. An average supermarket has about 50,000 SKUs.

According to Food Marketing Institute research, 71 percent of Hispanics do their major shopping at supermarkets. Another study last year by that organization found that 78 percent of the surveyed Spanish-language-preferred Hispanics say that frequent shopper cards are important in deciding where to shop.

But the marketing aimed today at this Hispanic audience is anything but segmented on the basis of buying behavior.

"Packaged goods companies and retailers already are doing some form of Hispanic marketing, and they're just wasting money," said Eric Holmen, executive director of business development at Catalina's direct marketing services division. "It's a big miss. They're going after surnames or opt-in lists and getting a skewed market.

"Basic marketing principles still apply. You still need to know: Are they the right demographic? Are they purchasing the right things? Are they in the market? Are they out of the market? All the other things apply, so the Hispanic marketing starts with surname, but the targeting criteria has not caught up with what we're doing overall."

Whether perception is reality will be answered when the Catalina mailer drops.

"Hispanics are shopping in supermarkets, obviously," Hernandez said. "We have their loyalty cards. They're showing transactional behavior. In a sense, we're marketing to the Hispanic market today through transactional behavior. But this is a way to say now we want to know that we're talking a little bit more to the Hispanic audience."

The mailer itself is a work in progress. Plans call for a bilingual piece for better response. Creative will show a representative Hispanic household with a positive tone and relevance.

Holmen and Hernandez would not disclose the packaged goods marketers that are participating. But products include dairy items, condiments and health and beauty products.

The 8.5-by-5.5-inch booklet most likely will go by Standard mail.

Interestingly, Catalina will not stray far from the beaten path. The mail piece is based on a co-op mailer format used before for this supermarket chain in Southern California. Moreover, Catalina prefers the booklet format over loose inserts for a cohesive look.

"We're using things that have proven themselves successful in our typical marketing for this client," Holmen said. "So we're kind of minimizing the things we change. What we're trying to affect is the difference of that Hispanic message compared to the average response we get in a non-Hispanic message."

Southern California was chosen for the obvious reason: Sixty percent of U.S. Hispanics live in California.

What the test will yield is anyone's guess. Catalina may reach newly immigrated Hispanics or those here for a few generations with a higher degree of acculturation. But the learning will be useful.

"I think what this will do is enhance the performance of the marketing that our clients are already doing," Holmen said. "So we may distribute more incentives as a result of this because we're able to learn more about this type of customer, so we'll reach them in a more relevant format."

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